By Conor Humphries and Amanda Ferguson
BELFAST (Reuters) - When Northern Ireland leaders this month warned of the imminent collapse of the power-sharing government that helped end decades of sectarian killings, the reaction on the streets of Belfast was apathy not panic.
After almost two years of perpetual crisis there is a growing exasperation at the pro-British Protestants and Catholic Irish nationalists who have called in international mediators to solve a Cabinet dispute for the third time in three years.
Frustration has shown up in voter turnout, which has fallen from the highest of the United Kingdom's four nations in general elections in the 2000s to the lowest at the last two votes.
The paralysis is already affecting public services and damaging the investment climate in one of the poorest parts of Britain, which aims to attract multi-nationals to build an economy hurt by decades of conflict.
If Northern Ireland's government falls, London may be forced to reimpose direct rule, which politicians say could even bring back violence by dormant paramilitaries.
"Stormont [parliament] is a shambles... it's a political joke," said Belfast tour guide Owen Hamilton, who in the past voted for the largest pro-British Party, the Democratic Unionists, but is considering giving up voting. "They are like children in a playground."
A compulsory power-sharing government created under a 1998 peace deal is now frozen, after the pro-British First Minister Peter Robinson stepped aside in protest at reports by police that the Irish Republican Army (IRA) was still active.
The peace agreement led to the disarming of the mainly Catholic IRA, which fought for decades against British rule. Its political allies Sinn Fein have since shared power in government alongside their mainly Protestant pro-British foes.
But members of both main parties have been regularly warning of collapse for almost three years, during which the government has failed to agree on budget cuts mandated by London.
The frustration is particularly sharp among members of a more liberal younger generation, less focused than their parents on the sectarian battles of old. Sixty percent of 18-29 year olds said they don't vote, a University of Liverpool survey showed this month.
"Young people have diverse opinions but there is a prevailing opinion that we are fed up, and it's not just young people: everyone is," said Robert Murtagh, 19, a volunteer with the Public Achievement youth organization in Belfast.
Deputy First Minister Martin McGuinness of Sinn Fein said a collapse of the power-sharing government would lead to a vacuum that could be exploited by dissident militants opposed to the peace deal.
Security analysts see little appetite for a return to the kind of violence that killed 3,600 people in the three decades before 1998.
The flaws of forced coalitions have become more apparent in recent years, with the parties gridlocked over divisive issues like the monitoring of paramilitaries and rules about the flying of flags, distracting them from day-to-day governing.
While the system avoids one side of the sectarian divide dictating terms to the other, each knows it can blame the other for any political failure, destroying trust.
A system designed to protect minorities allows parties from either side of the sectarian divide to veto measures they don't like.
An attempt to cut corporate tax, to better compete with the Irish Republic, has been frozen for over a year due to disagreement over implementing social welfare cuts.
The system resembles power-sharing agreements in other post-conflict countries like Bosnia and Lebanon, which provide a basic level of security but can be fragile and create gridlock, said Neil Jarman, director of the Institute for Conflict Research, a Belfast-based think tank.
"There needs to be some form of rethinking of the process. Whether collapsing the agreement would act as a stimulus for that or if it would set the whole process back" is not clear, he said.
Still, the freezing of the old sectarian political process could create more room for newer parties that emphasize other issues.
While parties traditionally associated with the two religious groups accounted for more than 80 percent of votes at the last general election in May, there are signs that Northern Irish voters are looking past sectarian loyalties.
The non-sectarian Alliance Party saw the biggest hike in support. The Green Party and hard-left People Before Profit roughly doubled their small support base.
"We hear constantly about the 'two communities' in our society. But rarely in political discourse do we hear about the rich and the poor communities," said Gerry Carroll, a People Before Profit councilor who secured a 20 percent of the vote in Sinn Fein's west Belfast heartland in May's election and sees support growing as austerity policies bite.
"People are looking at the current situation and are fed up," he said.
(Editing by Peter Graff)